Gareth Soloway argues the video is a tactical risk-off call on US equities and a near-term bullish call on oil, with the key immediate driver being geopolitical shock and the market’s reaction at Sunday night futures open. He thinks the S&P 500 is vulnerable to a breakdown below a head-and-shoulders neckline, while oil may spike first and then become a short once it reaches the $77-$80 area.
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Gareth Soloway opens by saying the Sunday night futures open should gap sharply lower if the military action continues, though he allows that a quick resolution would change the reaction. He expects oil to spike sharply higher, notes oil is already up about 20% since his early-year call, and highlights the Straits of Hormuz as the main escalation risk because roughly 20% of global oil passes through there. He then shifts to technical analysis on the S&P 500. He describes a long-running parallel channel and rounded-top structure as evidence of distribution and weakening upside. In his view, upside is constrained by major resistance, and the critical immediate level is the January low pivot around 6799-6800. …
Tactically bearish on US equities into the Sunday night/Monday open, with a likely gap-down setup and key downside confirmation at the S&P neckline. Bullish crude on the immediate headline shock, but he would fade it into the upper-$70s if the spike extends.
Over the next several weeks, the base case is a two-step path: an initial equity flush followed by a tradable bounce, while oil either cools after the event or stays elevated only if escalation persists. The setup improves for bears if the S&P loses 6799-6800 and heads toward the 6100 zone.
Structurally, he is arguing that the market is in a topping regime where technical distribution and geopolitical shocks can overpower bullish consensus. The lasting implication is a more defensive stance on equities and a recognition that crude can remain a macro lever whenever Middle East supply risk reappears.
Markets are likely to gap sharply lower when futures open Sunday night into Monday if the military action is still unresolved.
He says the immediate futures reaction should be down sharply unless the action is over by Monday.
Oil is likely to spike sharply higher on the initial market reaction.
He expects the overnight move to be up sharply in crude because of the geopolitical event.
The Straits of Hormuz are the biggest question mark because roughly 20% of the world's oil passes through them.
He uses the chokepoint as the main reason oil risk premium could widen further.
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